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FEDERAL RESERVE SYSTEM: THE central bank of the United States. It includes a Board of Governors, 12 District Banks, 25 Branch Banks, and assorted committees. The most important of these committees is the Federal Open Market Committee, which directs monetary policy. The Fed (as many like to call it) was established in 1913 and modified significantly during the Great Depression of the 1930s. It's duties are to maintain the stability of the banking system, regulate banks, and oversee the nation's money supply.
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Lesson 14: Aggregate Supply | Unit 1: The Concept
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Page: 2 of 20
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Aggregate supply is the relation between real production, measured as real GDP, and the price level, measured as the GDP price deflator.- This is comparable to the relation for aggregate demand and lets us combine both relations to form the aggregate market.
- How does the price level affect the supply of real production? For markets, the law of supply is that a higher price induces an increase in the quantity supplied. Does this work for aggregate supply, too?
- How the price level affects real production depends on the difference between the short run and long run.
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DEMAND The willingness and ability to buy a range of quantities of a good at a range of prices, during a given time period. Demand is an inverse relation between price (demand price) and quantity (quantity demanded). Demand is one half of the market exchange process--the other is supply. This demand side of the market draws inspiration from the unlimited wants and needs dimension of the scarcity problem.
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Three-forths of the gold mined each year is used to manufacture jewelry.
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"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
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BA
Bank Acceptance
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